Extended Producer Responsibility

Mandated and Voluntary Practices in the U.S.: Is this the Future?

John Meindl

The adoption of Extended Producer Responsibility Programs (EPR), on either a mandated or voluntary basis, is on the upswing in the U.S. EPR is simply a concept that extends the long-term responsibility (liability) associated with a product back to a designated party other than society. Typically after a product’s in-use life is over it winds up in the public domain. Many products disposed of in this manner (i.e., landfill) wind up becoming a long-term societal liability in terms of cost and environmental effects (ground, air and water).

Taking into account the unfair costs to taxpayers as well as the negative environmental impact caused by this type of process, many states have legislated mandatory EPR in the form of take-back laws for such products as:

Auto batteries

Bottles and cans

Cell phones

Electronics

Paper

Plastic bags

Tires

Sharps (pointed instruments)

Motor oil

Isotopes

The manufacturer or distributor of these products is required to manage the process of taking back the product and managing its disposition and, therein, (maybe assume) long-term liability. The concept of designating who assumes the long-term economic and environmental responsibility for products is gaining such momentum that many industries are now initiating voluntary take-back programs for such products as:

Cosmetics

Pharmaceuticals

Game consoles

Rechargeable batteries

Clothing

Metal hangers

Camera film

Ink and toner cartridges

Thermostats

Lighting

Crates

Office furniture

Office equipment

Household appliances

As such, it appears many industries are trying to get ahead of the legislative curve as well as build a better reputation with customers, potential customers or other influence groups by implementing their own take-back programs.

Voluntary take-back programs emerge when one or more of the five following characteristics dominate:

Current disposal practices are unregulated and there is a high risk of improper disposal and associated liabilities.

The discarded product carries a high-value and has a long shelf-life (low-frequency purchase) consequently only limited transactions occur between a manufacturer and end user.

A relatively close or ongoing relationship exists between the customer and manufacturer which the manufacturer seeks to maintain in good standing.

The product is considered “high-end” and the pursuit of environmental goals may enhance customer loyalty.

Does your industry and its products fit any of these characteristics?

Take-back programs are definitely on the upswing and without doubt, an increase in voluntary as well as mandated product take-backs will occur. However, take-backs are not occurring in many industries simply due to economics. Some products simply cost too much to take back and the associated price to the customer is too high (e.g., automobiles).

The key for certain types of industries, therefore, is the design and development of a product that never enters the waste stream. But how can this be accomplished and rationalized?! Industrial Ecology (IE) may be the answer.

IE is a design science being utilized today to produce products that reduce environmental impact while cutting costs and/or increasing customer benefits. Design science aims at improving the life-cycle of a product through a zero or minimal-waste concept. Products coming back to the manufacturer are disassembled and used as non-virgin raw materials for manufacturing the original product or some other product (i.e., down-cycling or recycling). As a market-driven solution, IE offers many industries a better process for achieving environmental benefits and business rationale, as opposed to a public policy- driven process like EPR, which more or less dictates structured relationships in a controlled format.

As we are experience an increase in mandated as well as voluntary product take-back programs (EPR), the ability to successfully address the waste management and environmental impact of many industries’ products will be predicated more on design than regulatory mandates. Product design processes based upon improved life-cycles are not just good citizenship but also good business, translating into potentially higher margin products as well as new innovative business models.

Author:
John Meindl is a Senior Fellow in the Corporate Education Center as well as an Adjunct Professor at Furman University. Mr. Meindl is the Lead Faculty Member in the Post-Graduate Corporate Sustainability Program as well as a lecturer in Strategic Management, Entrepreneurialism and Corporate Sustainability. Mr. Meindl is the Managing Partner of CIF Venture Fund.